Category Archives: DAO

Bitcoin wallet and security solutions provider Airbitz recently announced a partnership with WINGS to integrate Airbitz’s Edge Security login to decentralize private key security and help make DAOs accessible to a wider development community.

Airbitz and WINGS Partner to Secure the New DAO

Through the partnership, WINGS will implement sound processes for private key management, in turn making DAO participant actions more frictionless and overall increasingly secure.

Airbitz’s blockchain-inspired, zero-knowledge data security solution enables end-users to securely access a multi-blockchain environment with a single sign-on experience. As a result, users retain their ability to manage their own private keys and authentication, without trusting or interfacing with third party providers. Since its release, developers have been able to use this open-source Edge Security SDK for their decentralized applications.

“WINGS, much like Airbitz, is committed to delivering a user-friendly experience for people interested in using blockchain assets in their applications,” said Airbitz CEO Paul Puey.

“Our partnership with WINGS will make interacting with the next generation of DAOs a seamless and accessible experience. We’re proud to add WINGS to the growing list of premier blockchain apps powered by Airbitz Edge Security.”

DAOs are the closest realization to an automated organizational structure yet, bridging new decentralization and investment technologies to enable for expanded, internationally-focused business opportunities. WINGS combines the DAO concept with decision-making using decentralized forecast markets, while a front-end UI gives customers access to these advanced solutions through a smart phone. With the WINGS project, investors know that DAO technology and prediction markets give proposed projects sound infrastructure upon which to flourish.

“We’re excited to partner with Airbitz and offer this to the WINGS DAO community,”said Boris Povod, WINGS Core Developer. “Airbitz lets people easily interact with DAOs using stored encrypted private keys, and anyone can login simply with a username/password.”

Additionally, Airbitz recently announced equity in the company can be purchased via Wefunder.com for non-accredited investors, and on BnkToTheFuture for accredited investors. To date, Airbitz has raised over $440,000 from more than 200 different investors.

What do you think about the recent partnership between AirBitz and WINGS? What does a partnership like this mean for the future of DAOs? Share your thoughts in the comments below!

In light of certain developments regarding Slock.it’s titanic smart contract-driven project, The DAO, many are left with the question of how to cleanly exit. That’s a good question, though pretty contentious among the heavily staked DAO members. You can’t blame the more small time elements in the community for wanting to jump ship though, seeing as that ship has run over its tugboat (Ethereum) coming out of the harbour, and might be any combination of sinking, on fire, or packed to the brim with Africanized bees depending on how the vulnerability and theft are handled, the proposed Soft Fork and winding-down notwithstanding.

Exiting The DAO Uses The Same Functions as the “Hack”

The thing is, exiting or “splitting” The DAO didn’t seem to be common knowledge leading up to the attack that removed over 50 million dollars in ETH from the system. There weren’t any easily accessible tutorials or instructions, even from third parties, before the exploit. Granted, their Github has a stub explaining the necessary commands, and DAO wiki has a tutorial buried under loads of other information, but nothing that an average to low-information investor would have an easy time finding. I slogged through the documentation to find the complete process, and I’m here to tell you that cutting ties to The DAO would not have been easy.

It’s a simple, 67-step process; that only takes 48 days to complete in full. (it’s broken into 12 lengthy sections on the DAO wiki, with 5 out of the 12 offering no elaboration outside of their title) I think I see the reason, now, that it wasn’t made common knowledge among The DAO community. Regardless of how you feel the “fix” to The DAO attack and subsequent failure of the smart contract is shaping up, you have to realize that this lack of liquidity is deemed unacceptable in the vast majority of financial products if it isn’t explicitly stated, especially given the way Slock.It characterized The DAO’s nature and utility. I’m no lawyer, so I can’t characterize it as fraud, but it certainly is misleading.

The icing on the cake, though, is that an attacker could use your legitimate attempt at an exit to drain even more ETH from The DAO — as the exploit being used takes advantage in a security hole during the splitting process – and get it frozen by the ever well-meaning Buterin, leaving your money and tokens in perpetual limbo until this whole trash fire of a situation is resolved.

For those of you who invested, got burned, and just want to quit while you’re not too far behind, I’ll see you in 48 days. That is, if you successfully complete the 67 easy steps and your split isn’t exploited and frozen. For everyone else involved, there may be no legal recourse because the “hack” was carried out under the terms of the faulty contract governing The DAO’s behavior. Let’s hope Vitalik’s central intervention isn’t too ruinous for DAO investors, Ethereum, and Cryptocurrency as a whole in the long term.

Closely Following The DAO’s status? Let us know how you feel in the comments!

That’s right: your eyes are not playing tricks on you, I promise that you read that correctly.

I’ve seen my share of tinfoil-hatting on the subject of cryptocurrency and security, but Brandom’s conflation of these two completely different technologies takes the cake. The sheer ignorance required to put pen to paper and excrete a work like his recent article on the subject is astounding, but apparently achievable, as he so readily demonstrates.

For those of you that aren’t fond of supporting the spread of FUD through ad revenue, I’ve compiled a few highlights:

“To understand how this could have happened, it’s necessary to know a little bit about how Ethereum works. The system is built on the same blockchain that powers Bitcoin.”

Indeed. ETH uses SHA256 based proof-of-work, all ETH transactions are logged transparently on the Bitcoin blockchain, bitcoin miners are rewarded in ETH upon a successful payout, changes to Ethereum need Bitcoin node consensus, and Vitalik Buterin continues to be one of the primary contributors to the Bitcoin specification.

Here’s an example of an equally accurate statement: ammonia is healthy to drink, because it’s a liquid, just like water.

“In hindsight, it’s easy to blame the developers for not spotting the problem early enough, but the nature of the DAO project put them at a disadvantage. A coder building a web database has decades of code and security standards to draw on, but coding on the blockchain is a completely new field.”

Oh, of course! We all know that traditional stores of personal information, financial services and networks are immune to malicious actors, because the technology they rely upon is older!

How naive of me to assume that an open source, frequently audited technology based on cryptography could have ever been secure when it isn’t based on protocols and standards from the early 80’s.

Regardless of the fact that this assumption about blockchain technologies recklessly ignores the scale of theft and fraud in traditional fintech, it also directly contradicts his previous statement about the DAO developers’ awareness of the vulnerability.

He is in effect claiming that not only are blockchain technologies hopelessly insecure because they are new, (because apparently traditional best security practices cannot transfer to new technologies) but also that the DAO developers, who knew about the bug, and decided not to halt trading, unlike several other similar DAOs, were not negligent.

The attack on the DAO clearly wasn’t a failing of blockchain security. Plenty of other DAOs are fine. The attack was a failing of people. The same people that claimed that the titanic Ethereum-based organization was unsinkable. They failed to address a publicly-known vulnerability properly, and there were consequences to their actions.

“Theft is a long-standing problem for cryptocurrency, particularly for any institution large enough to make a tempting target. In 2014, the foundational Bitcoin exchange Mt Gox was revealed as massively insolvent in the wake of a $400 million theft, an event that resulted in permanent damage to the currency’s reputation.”

I honestly don’t have it in me to mock this one.

Theft is a long standing problem with people, and this issue we collectively have applies to anything worth stealing, not just cryptocurrency.

This line of reasoning also dictates that no one should use knives because “Stabbings have been a long standing problem for knives, particularly with any blade large enough to puncture the skin.” But polearms, bayonettes, hatchets, axes, and the like are safer, because they don’t look like knives.

The Verge Doesn’t Know Much About the DAO, or Digital Currency in General

Brandom Could’ve just as easily used the 145 million account PayPal breach that happened the same year as Mt. Gox, or the $21 billion USD of US credit card fraud that occurred in 2014 alone to make his point about security, but he equates two unrelated thefts, on two distinct cryptocurrencies, because they both show up in the buzzword tag-cloud when you search for the term “blockchain.”

Mt. Gox and the DAO attack did not stem from problems with the underlying technology of cryptocurrency, but failings with the people behind them.

In the case of Mt. Gox, it was trusting the people in charge of the exchange to secure the traditional, web-facing elements of their business properly. For the DAO, it was an issue of trusting the developers to respond promptly to security problems, just like every other competently put together DAO did.

Sure, Bitcoin is an easy target, but that doesn’t excuse the lazy and inaccurate comparisons drawn between Mt. Gox, the DAO attack, Ethereum, and Bitcoin, nor the intellectually bankrupt reasoning behind the comparisons.

Whether they stem from ignorance on the subject of cryptocurrency or sheer lack of due diligence, I’d take anything Russell writes related to the field with a grain of salt moving forward.

I genuinely don’t know which is worse: the ignorant and fallacious assertions made by Brandom in his article, or that the Verge saw fit to print his drivel.

What do you think about mainstream coverage of the DAO incident? Is it accurate? Let us know in the comments below!

The rise of Ethereum’s The DAO is certainly cause for excitement. However, for Dash, the prospect of successfully operating a decentralized autonomous organization is already old news.

Disclaimer: This article was provided by the Vanbex Group. Bitcoinist is not affiliated with the firms represented by the Vanbex Group and is not responsible for their products and/or services.

Created in 2014 by Evan Duffield as “Darkcoin,” Dash quickly grew from a platform for highly-anonymized transactions to a full service network for payments, project funding and decentralized governance by protocol.

Dash: Two Years Ahead

With all the talk about The DAO, people seem to have forgotten — or simply don’t know — Dash has been providing DAO-like services for a couple of years.

With its Decentralized Governance by Blockchain (DGB) functionality, anyone can propose changes to Dash. Masternode owners host monthly votes on these proposals, which range from marketing and community-based decisions to direct modifications to Dash protocol.

Dash’s project budget is funded by 10 percent of the block reward, which is entered into a fund that can be used to finance Masternode-approved projects.

Unlike The DAO, Dash funds its projects with money internal to the network, produced by miners, and controlled at the protocol level by Masternodes.

This method of funding promotes network strength, creating a positive feedback loop of internal capitalization that gets injected right back into the system for projects to improve the protocol.

The DAO, on the other hand, operates on a system of conflicting incentives, which could set the organization up for bouts of massive devaluation and ether dumping.

By requiring people to purchase DAO tokens with ether, the organization has also set up a system that turn DAO voting rights into a tradeable commodity, opening the door to crypto-token trading and other similar perils, vulnerabilities like pump and dump schemes, fraud and theft.

DAO tokens could even become more of a target for speculative day traders than those with genuine interest in voting and developing new projects.

Decentralized Governance

Since the rollout of its DGB functionality in last August, Dash’s system has continued to evolve via Masternode voting, itself an effective — incentivized — blockchain-based system.

It’s swift and reliable decision making process has also yet to reach any roadblocks caused by internal strife, a common good buoyed by the vested stake in the overall working of Dash that each Masternode owner possesses.

But even so, based on rough documentation, the upcoming Version 12.1 update to Dash will make the DGB system even more efficient with the addition of elected project managers.

They will also specialize in certain fields, such as marketing, legal and technical, while project managers will help to hire “employees” to complete approved projects.

Further, project managers will be held accountable by the network if they do not perform to the standards of the network or misuse the allocated budget.

In addition, with the new system in place, Masternode owners won’t have to be heavily involved in projects beyond the voting stage, allowing them to use their resources to work on other areas of the Dash network.

“We’ve decided to create a structure which will allow decentralized teams to personally manage our investments for the full life cycle of each project,” said Duffield.

“We hope other projects will adopt a decentralized version of some sort of management structure as well,” Duffield continued. “We consider this a critical component of a successful implementation.”

In March, Dash laid out a more concrete outcome of Version 12.1, slating it as a plan to make Dash more accessible to mainstream users.

Duffield said that, as 12.1 gets rolled out, the core development team will turn most of its attention to creating “fiat access ramps,” which he described as “more liquid and better fiat-dash exchange services.”

Since the announcement, Dash has been integrated with Deginner, Coinapult and Crypto Capital to provide users with fiat-dash exchange services. With these “direct fiat access ramps” in place, Duffield believes that Dash will be able to move into its next growth phase.

With these real-world projects organized by the Masternode network the company has proven its viability in the space of decentralized autonomous organizations.

With a market cap of $52.4 million USD, Dash is currently the fifth-largest cryptocurrency in the world, sixth if The DAO is considered a separate cryptocurrency entity.

Decentralized autonomous organizations have received much attention in recent weeks since Ethereum launched its new Decentralized Autonomous Organization platform, featuring projects such as Slock.it and Digix, among others. Ethereum has chosen to ignore the elephant in the room in its press releases: there’s another DAO. It’s Bitcoin, and it’s the biggest blockchain technology around.

The First DAO

Ethereum

Bitcoin is undoubtedly an online creation community: an internet based ecosystem of participants who contribute – often in isolation of each other – towards one single stated project or goal. Online creation communities create a robust cross-section of the Internet, and while a quiet phenomenon, they have built, and will continue to build, the Internet of the future.

Bitcoin, based on a distributed protocol that provides financial services based on certain parameters, represents a distributed autonomous organization. Jeff Garzik, early Bitcoin developer, calls Bitcoin the decentralized autonomous organism.

While Ethereum has garnered attention for the DAO concept, it’s true that Bitcoin has existed in a similar form since 2008. And, since then, we have seen it evolve as a decentralized organization and incorporated numerous services. Side chains, a blockchain application interoperable with Bitcoin, offer a promising horizon to extend the Bitcoin protocol’s features.

Although the connection of Bitcoin as a DAO does not grace press releases of projects promoting their products, Ethereum has admitted that “Bitcoin is an interesting case here” and likely constitutes a DAO more than other blockchain organizations. In a May 2014 blog post at Ethereum.org, Vitalik Buterin – co-founder and developer of Ethereum – admits Bitcoin takes the form of a DAO.

Buterin posits Bitcoin, however, is not a perfect DAO. He cites an incident in 2013 when a block was accidentally produced and confirmed by BitcoinQT 0.8 clients. That block was invalid according to the parameters of BitcoinQT 0.7, the previous Bitcoin client. This caused the blockchain to fork, meaning nodes did not know which chain – 0.7 or 0.8 – was the correct one.

“Most mining pools had upgraded to BitcoinQt 0.8, so they followed B1, but most users were still on 0.7 and so followed B2,” Buterin writes. “The mining pool operators came together on IRC chat, and agreed to switch their pools” in such a way that meant as little stress for users as possible.

“Thus,” Buterin proceeds, “in this case, there was a deliberate 51% attack which was seen by the community as legitimate, making Bitcoin a DO rather than a DAO. In most cases, however, this does not happen, so the best way to classify Bitcoin would be as a DAO with an imperfection in its implementation of autonomy.”

Buterin adds that some people do not classify Bitcoin a DAO because the digital currency, founded in 2008 by Satoshi Nakamoto, “is not really smart enough.” Buterin sees the sense in this opinion.

“Bitcoin does not think,” the Ethereum developer writes. “It does not go out and ‘hire’ people with the exception of the mining protocol, and it follows simple rules the upgrading process for which is more DO-like than DAO-like. People with this view would see a DAO as something that has a large degree of autonomous intelligence of its own. However, the issue with this view is that there must be a distinction made between a DAO and an AA/AI. The distinction here is arguably this: an AI is completely autonomous, whereas a DAO still requires heavy involvement from humans specifically interacting according to a protocol defined by the DAO in order to operate. We can classify DAOs, DOs (and plain old Os), AIs and a fourth category, plain old robots.”

The programmable token Ethereum and its blockchain have been breaking the mould ever since its pre-sale was announced back in July of 2014. It launched with its initial sale in September of the same year and raised over $18.3 million USD becoming the sixth largest crowdfund to date. Following the exponential growth of Ethereum, developers who help maintain the community and Ether protocol have created a decentralized autonomous organization called the DAO. The platform is built to support fund Ether projects and has recently skyrocketed past the Ethereum pre-sale becoming the biggest crowdfund ever raising a whopping $119 million so far.

The World is Changing. The Ethereum DAO Hub What is it?

The decentralized autonomous organization known as the DAO is no more than code that runs a structured governance platform. The beginning of this concept is truly mesmerizing to many as it’s one of the first times this type of infrastructure has been built using the Ethereum blockchain. A DAO is not run like your typical company or large corporation and allows the initial steps of decentralized transparency to take hold with this type of organization. The framework behind the DAO was implemented by the Slock.it the team is well known for working with IoT solutions using Ethereum.

For seventeen days now the DAO sale has been growing big and is making headlines all across both crypto-based media outlets and with mainstream news as well. When it approached the landmark $100 million point, the project became one of the most powerful organizational frameworks based on only code. The hub of the DAO is a series of smart contracts constructed on the Ethereum blockchain and anyone who has invested in its native token has voting power within this newly created system. In the corporate world rules are governed by executives, investors and outside entities which are often found to be quite fallible. Without explicit agreements, these operations can falter to the wayside and manipulate the interests of common investors. However with the spawning of the Ethereum-based decentralized autonomous organization its activity, rules, and voting is determined by the contracts written with the Solidity programming language.

Ether the digital fuel that powers the Ethereum network is also used by the DAO for its functions and operations. When someone wants to start a project and fund it through the DAO, it initiates a “Creation Phase” in which all rules are executed by code. The protocol stores the Ether and native DAO tokens within its framework but “requires a ‘Contractor’ to build a product, write code or develop hardware.” All DAO token holders can become a Contractor and submit a new project but it must be approved for it to initiate a smart contract proposal. The projects white paper states:

“Such smart contracts can be parameterized and enable a DAO to interact with and influence the project it chose to support.” — DAO Hub’s White Paper

What Will Decentralized Autonomous Organizations Do For Society?

The implications of the DAO is pretty huge as it’s a very new concept that undermines the need for third party entities. Many facets of society could use this model and it could reinvent the very mechanisms of infrastructure we rely on. Concepts such as newly formed voluntary governance structures based on actual consent and voting of the participants. A DAO like architecture could remove the current oligarchic system run by a small minority of fallible humans and reform it into a framework based on code and self-executed smart contracts. For the most part, contracts make the world operate but are riddled with costly and needless third-party arbitration such as lawyers, accountants, and board members. The father of smart contracts Nick Szabo once said, “I argue that the formalizations of our relationships — especially contracts — provide the blueprint for ideal security.”

Alongside the change of governance corporate entities could also rebrand into a decentralized autonomous organization as well. It would cut costly overhead that comes with hiring attorneys, massive amounts of paperwork, and logistics that can take weeks to settle. The existing system is quite cumbersome and has been for years; with the introduction of a DAO protocol/community society’s idea of hierarchical roles of importance vanish. Blockchain and digital currency enthusiasts are starting to believe the DAO architecture could replace these traditional corporate models. However, it remains to be seen whether or not it actually will work.

The crowdsale is doing very well but the model actually operating and doing what it’s supposed to is another story for the future. It is just the beginning stages of the popularity of the DAO concept taking hold. Other innovators within the digital currency and blockchain space have also been working similar concepts. Projects such as Swarm, BitNation, and Expanse are others who have dabbled with the idea. Some have discussed the idea to great length and some have initiated their own formations of a DAO as well. There are those that feel the project has room for improvements concerning the current and popular Ethereum DAO. Bitcoinist spoke with BitNation’s Susanne Tarkowski Tempelhof and she gave her opinion of the DAO introduced by the Slock.it team saying:

“I’m tremendously excited about the remarkable achievement of The DAO, it sets a successful precedent for all of us to operate in a post-centralisation world where only a few powerful entities, may it be banks, governments, or venture capitalist funds, could tell us how to live and operate. Although much writing and ideas been circulating about it for years, in my opinion, The DAO seems to be the first ones to have brilliantly popularised and implemented it (at least as far as the crowdsale and GUI goes), which is definitively a game changer in this space. When Slock.it first released their code on GitHub, and on various Google doc’s, I jumped on it, like a kid with a new bike, realising it could be a framework for Decentralized Borderless Virtual Nations (BDVNs) – but with some modifications, namely, the removal of democracy. Why remove democracy, one might ask? Isn’t democracy the beacon of all freedom? No, democracy is the rule of the majority, mob rule, stripping away people’s rights —— simply because they happened to be outnumbered. Alexandre Van de Sande, the fantastic MIST developer, and I sat down in January in Rio discussing the pros and cons of a democratic organisations, and how to deploy the Ethereum DAO code in the DBVN context. The rational conclusion to draw from it, is that different organisational types suits different personality types. And that’s the beauty of The DAO. They set a precedent, just like Bitcoin, that everyone can follow, or fork, and make their own. Just like we’re doing with our Virtual Nation, who we hope will operate in compatibility and computability, with The DAO, and the DAOs it will empower. The future is very bright, indeed.” — Susanne Tarkowski Tempelhof Founder & Chief Unicorn of BitNation

The world is seeing a whole lot of new ideas and concepts such as decentralized autonomous organizations, permissionless cryptocurrencies, and architecture built with smart contracts are growing more popular every day. Society’s norms are changing with each new technological step towards a free market and a DAO is one of these steps. Surely there will be more but Ethereum’s current model is proving to raise eyebrows with its immense funding of capital. Now all that remains is putting the code to the test.

What do you think about decentralized autonomous organizations and the current Ethereum DAO version? Let us know in the comments below.

Images via the DAO Hub website

** Disclaimer the spot price of Ether also will determine if the project continues to hold the #1 crowdfund spot.

An interesting change is taking place in the world of exchanges right now, as many of the major platforms will be added the Standard DAO Framework in the coming months. Moreover, most of these exchanges now include a data field for Ethereum transactions, which opens up a lot of interesting opportunities.

Standard DAO Framework Integration Is A Milestone

People not versed in the world of Ethereum may have never heard of the Standard DAO Framework, but the concept is rather easy to explain. This new standard would allow any Ethereum user to interact with existing DAOs – as well as create new DAO tokens – through any of the participating exchanges.

What makes this solution so appealing is how all of this could be achieved through the exchange platform directly, rather than having to jump through several hoops. More importantly, DAO tokens can be created without a pre-existing Ethereum account. This would allow for the immediate creation and management of these tokens on that particular exchange.

Right now, this particular “Creation Module” will be integrated by Gatecoin and Bittrex shortly. Additionally, these two platforms want to make all of the DAO tokens on their exchanges tradable sooner rather than later. Users of these exchanges would then be able to create a DAO, and accept all of the supported cryptocurrencies and fiat currencies as payment.

The other main exchanges are looking to integrate the Standard DAO Framework as well over the coming months. Kraken, Bity, and ShapeShift are the other parties who have confirmed support for this open source initiative. By adding a data field to their local exchange offerings, users can directly interact with existing DAOs or call functions within existing smart contracts.

This news will elevate the Ethereum cryptocurrency to more than something that can “only be traded”. Instead, Ethereum becomes completely programmable, which will have a significant impact on future DAOs and Dapps that will be created. Whether additional exchanges will follow this lead by example, remains unknown for the time being.

What are your thoughts on the Ethereum Standard DAO Framework? Let us know in the comments below!